MNI China Press Digest, Oct. 16: Stock Market, Tax, SOEs

     BEIJING (MNI) - The following lists highlights from the Chinese press for

Tuesday:

     Market expectations of efforts to stabilise the tumbling stock market were

supported by positive signals from recent speeches made by heads of three major

regulators, the People's Bank of China (PBOC), China Securities Regulatory

Commission (CSRC) and the Ministry of Finance, said Securities Daily in a front

page opinion piece published on Tuesday. Steady monetary policy and proactive

fiscal policy are the driving forces for the ongoing deepening of capital market

reform and development, the newspaper said, noting that the complementary nature

of these policies require close cooperation from the three authorities. The

finance minister has promised to work on a larger scale of tax and fee

reduction; the PBOC governor has confirmed that there is room for further

monetary policy adjustment; and the CSRC chairman stated that he has met private

equity representatives and individual investors to discuss specific reform

measures this week, reported the Daily.

     Enterprises focusing on cutting overcapacity are to be exempted from the

land use tax and property tax when they suspend operations for restructuring,

according to the new rule released by the Ministry of Finance and the State

Administration of Taxation on Monday, Xinhua News reported. The new regulation

is in line with the country's supply-side reforms through industrial

transformation, which aims to encourage companies to upgrade their production.

These companies are not allowed to enjoy the tax exemption policy for more than

two years, as it will take effect from the beginning of October till the end of

2020.

     State-owned enterprises (SOEs) acquiring privately owned listed companies

is normal market-oriented behavior, and it is a market choice with mutual

benefits, said People's Daily on Tuesday, in response to recent worries that

SOEs may merge with or acquire private firms on a large scale amid ongoing stock

market turbulence. The increase or decrease of state-owned capital follows the

laws of market economy and enterprise development, the newspaper said, citing

Peng Huagang, deputy secretary general of the State-owned Assets Supervision and

Administration Commission (SASAC). SASAC is against having different rules from

differences in corporate ownership, and opposes the discriminatory treatment of

SOEs in the formulation of international rules, Peng emphasised.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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